Tracking expenses: keep detailed tracking or just basic categories?

[Linea_Norway]

Hi.

I have been tracking my expenses in detail for 2 years, one layer with 10 top categories and each has 10 under categories. It is great for when you want to see where the money has really gone. But in practice I only make graphs of the first level of tracking. I am also not a mindless spender and have good control of what I spend on. In my excel sheet I can read the actual transactions of I really need to see details.

What do you other Mustachians do? Detailed tracking of just one basic layer of categories?

I am still hoping that my DH would ever join. Or if could categorize his spending. That would be easier to do if we only had one level of categories.

[Michael in ABQ]

I've been keeping track of about 35 categories for the last 5 years. Some of those were individual debts which have since been paid off. I've recently tried to consolidate to fewer categories as well because I was not staying up on tracking all of it. We're down to about 20-25 now, though several are just individual utilities which get rolled up into one large category.

My wife and I aren't natural spenders so it's not really necessary to drill down to that minute level of detail. We have 6 kids so our biggest item is groceries. Most of the other categories rarely exceed $100-200 unless is something like Christmas (gifts) or school shopping (clothing).

I'm too detail-oriented to get by with just 5-6 categories though. I feel like that would be almost meaningless for me.

[Laura33]

I think it depends on your personality.  Personally, I am not a detail person, in any way, shape, or form.  So I started with four categories -- I think it was something like food, home, car, stuff.  Over time, I added more categories as life got more complicated, but I can't imagine using 100! 

I reserve the subcategories for areas where I specifically want to work on my spending.  For ex., my "food" category has separate sub-categories for groceries, lunches (DH), takeout, and eating out.  Lunches I can't do anything about, so I break that out as "not my problem."  The other three I like to keep an eye on for bloat, but what I focus on will be different if the bloat is in takeout vs. groceries, so for me, that breakdown is helpful. 

OTOH, "car" is still "car," because those are largely fixed expenses that aren't going to change unless I downgrade, and since I'm not willing to do that, no sense wasting time tracking in more detail. 

[Linea_Norway]

I am a very organized person who keeps lists of things I need to remember. So I like some detail. But as mentioned, putting together some categories could be smart and detailing some others.

[Raenia]

Currently we track joint expenses in the following categories:
 - Home (incl. rent, utilities, phone, etc) - these are expenses that we can't really control, other than making sure the gas/electric doesn't creep too much
 - Consumables (food, toothpaste, OTC meds, TP, etc)
 - Entertainment (eating out, movies, travel, events)
 - Car (gas, registration/insurance, maintenance)
 - Other

For my personal expenses, I track the additional categories:
 - Hobby
 - Eating Out (mostly work lunches)
 - Gifts/Misc

As you mentioned, if I need any more detailed data I can always go into the actual spreadsheet and look at the individual transactions - for instance, if I notice the Entertainment category is over budget, I can go in to the data and remember that the charge for the season tickets hit this month, or that we are ordering takeout too often, or whatever.  I used to have more categories - splitting health/hygiene from food, for instance, or splitting eating out from other entertainment - but I simplified it down because my DH has an easier time with fewer categories.  I haven't noticed any problems or slippage from consolidating categories.

[ATR]

I track the following categories:

- Mortgage
- Taxes
- Insurance
- Utilities
- Medical
- Transportation (drilled down further into Uber/Lyft, Metro, and Gas)
- Household (cleaning supplies, etc)
- Groceries
- Restaurants
- Car Maintenance
- Recreation/Exercise (yoga, soccer, etc)
- Clothing
- Gifts

Those cover most of my expenses. There are usually a few miscellaneous line items that will get categorized separately when necessary.

[mtnman125]

Good thread, I've been thinking about this after my 2018 "review"

For fixed/mandatory expenses I have a bunch of categories which I think is overkill since they are so consistent.  My justification is that I want to keep tabs on utility bills if there is any variance.

For discretionary, I think I want MORE specificity.  We buy dog food, baby wipes, TP, paper towels, etc from Costco so those score as "groceries".  Anything and everything bought from Amazon/Target/Kohls is all scored as "General Merchandise" so diapers are categorized the same as some stupid kitchen thing I "had to have" from Amazon.

Those 2 categories are the biggest (besides daycare and mortgage), so planning to sub divide a bit better this year.  Either as categories in Personal Capital or on Excel sheet.  I don't think in Personal Capital I can separate a single transaction into multiple categories. Has anyone done this?

[innkeeper77]

This year I wanted to get better reports from my financial data, so I have been revamping my expense categories. We track finances with a shared database and the program gnucash, and it's reports generally has a feature to show only top-level accounts to a certain level, so I can be as detailed as I want as long as my general categories are sane and simple. I don't quite have a good revamped category system yet, but I am updating it every time I enter an expense this month.

[seattlecyclone]

I use Quicken to track. Looking back at our spending for the past year we use 22 top-level categories, and about half of these have a few sub-categories (never more than six sub-categories for a top-level category).

[diapasoun]

I have 30 categories, divided into 5 groups: savings/investments, monthly necessities (rent, groceries, utilities), monthly discretionaries (restaurants, charity, books), occasional necessities (car repairs, medical), occasional discretionaries (gifts, travel).

I'm also a fairly detail-oriented person, and the system I have stems from when I was a grad student and had to keep an incredibly tight hand on all of my accounts. It might be a bit too fine-grained -- for example, I spent less than $250 combined on books and craft supplies last year, but still have both broken out separate from miscellaneous. That being said, I still find that fine-grained analysis helpful, because it allows me to keep track of the kind of spending that can be rough for me.

[2Birds1Stone]

Tracking 100 categories sounds a like crazy to me, and I'm a spreadsheet nerd/10.

[Linea_Norway]

I have 30 categories, divided into 5 groups: savings/investments, monthly necessities (rent, groceries, utilities), monthly discretionaries (restaurants, charity, books), occasional necessities (car repairs, medical), occasional discretionaries (gifts, travel).

I'm also a fairly detail-oriented person, and the system I have stems from when I was a grad student and had to keep an incredibly tight hand on all of my accounts. It might be a bit too fine-grained -- for example, I spent less than $250 combined on books and craft supplies last year, but still have both broken out separate from miscellaneous. That being said, I still find that fine-grained analysis helpful, because it allows me to keep track of the kind of spending that can be rough for me.

This sounds like a smart system, necessities versus discretionaties. The one you can easily cut down on, the other not without a a lot more hassle.

[Linea_Norway]

Tracking 100 categories sounds a like crazy to me, and I'm a spreadsheet nerd/10.

I felt a need for 10 or so main categories. And in excel, I put in the option for 10 subcategories. They are not all in use.
But yes, I found out that I probably have too much detail, so I want to make a change of some kind.

[Linea_Norway]

Good thread, I've been thinking about this after my 2018 "review"

For fixed/mandatory expenses I have a bunch of categories which I think is overkill since they are so consistent.  My justification is that I want to keep tabs on utility bills if there is any variance.

For discretionary, I think I want MORE specificity.  We buy dog food, baby wipes, TP, paper towels, etc from Costco so those score as "groceries".  Anything and everything bought from Amazon/Target/Kohls is all scored as "General Merchandise" so diapers are categorized the same as some stupid kitchen thing I "had to have" from Amazon.

Those 2 categories are the biggest (besides daycare and mortgage), so planning to sub divide a bit better this year.  Either as categories in Personal Capital or on Excel sheet.  I don't think in Personal Capital I can separate a single transaction into multiple categories. Has anyone done this?

I do not like to divide bills into separate categories. Therefore, all from the grocery store are marked as food and all from the store that sells washing detergent, but also candy, I mark as non-food. Even though there is some overlap between the bills.

[Zikoris]

I have detailed categories because I use Mint and it all gets taken care of automatically, but I definitely would pare it right down if I was doing any sort of manual tracking. Probably Housing, Travel, Food, Bills, Other. That actually wouldn't be too different than my current setup, since Housing, Travel, and Food already make up over 80% of my spending, so I just end up nitpicking over the remaining 20%, lol.

[Spruit]

When I start tracking a new month, I copy the tab from the previous month. Each sheet starts with the monthly bills that are the same month to month (automatisch incasso) for rent, internet, energy, insurance premiums etc. I always do a quick check to see if those bills haven't changed.

I categorize everything into housing (subcategories are rent, utilities, internet/TV), groceries, pet, health care, subscriptions (library, insurance etc all grouped together), transport, hobby/fun, clothing, other.
Some categories have disappeared or got regrouped over the years, others have popped up as our lives have changed.

[Linea_Norway]

When I start tracking a new month, I copy the tab from the previous month. Each sheet starts with the monthly bills that are the same month to month (automatisch incasso) for rent, internet, energy, insurance premiums etc. I always do a quick check to see if those bills haven't changed.

I categorize everything into housing (subcategories are rent, utilities, internet/TV), groceries, pet, health care, subscriptions (library, insurance etc all grouped together), transport, hobby/fun, clothing, other.
Some categories have disappeared or got regrouped over the years, others have popped up as our lives have changed.

It makes sense to make "housing" one big category. In the end, it is the total price of housing that is imporant, whether you own a house or rent a place.

Also transport. Whether I take the car or train is irrelevant, but the total spend is. And whether car money is spent on petrol, ferries, payroads, car repairs is not relevant either. Although I would like to track what we spend on repairs from year to year.

[Linea_Norway]

I have removed one of my main categories, which is education. I placed it under Hobby.
And from 2019, I am removing all subcategories. That leaves 14 main categories only. That means that from now on, an incidental ice cream falls under Food, instead of under Fast Food or Entertainment. But I'll survive that.

My main categories are now:
- Cabin
- House
- Transportation (but not including plane travel for vacation)
- Trade (buying stuff but not clothes)
- Food
- Entertainment
- Health
- Clothes
- Hobby
- Travel
- Leave out
- Uncategorized (a neglectable amount)
- Income
- Savings

One big issue is that "travel" is so vague. When taking a plane to another country, that is obviously travel. But we often drive, either to our own cabin or to some other place in the country, or to Sweden. That is all collected under transport, as I put fuel there. Eating out during travel could also be placed under Entertainment. But I wouldn't know what to do about the extra cost of overnight stay. So I will probably keep the travel post, as I don't know how to divide it otherwise.

[Spruit]

What I did to keep track of "extra" food during travel, was deduct the normal amount from the total. So let's say we spend 300 on food in a normal month, and in a travelling period we spend 200 in 2 weeks, that means that anything above 300/2=150 euros is a travel expense (50 euros in this case). I think this is fair; even when camping and cooking our own food most of the time I'm not as efficiënt as when I can use my herb collection and cheap stockpile of food. Plus I like to indulge sometimes, which isn't really a problem but IMO should not come out of my normal groceries budget.

Same thing goes for transportation: if you normally spend x amount on petrol, and that particular trip you spend more, than the extra is the additional cost of travel.

This works for us, as we keep a fixed travel budget and if the money from the travel fund is gone, it means no more (small) trips for a while.